About 50 years ago, the U.S. Supreme Court held that Title VII of the Civil Rights Act of 1964 does not prohibit employment discrimination based on citizenship, except where citizenship discrimination has the purpose or effect of discriminating based on national origin. The discussion of citizenship discrimination in the Equal Employment Opportunity Commission fact sheet on national origin discrimination tracks that ruling.
A divided three-judge of the U.S. Court of Appeals for the Ninth Circuit, however, recently ruled that a 19th century federal law that gives “all persons” the “same right” to contract “as is enjoyed by white citizens” prohibits discrimination in hiring against U.S. citizens based on their citizenship.
U.S. citizen challenges Facebook’s alleged preference for noncitizen visa holders
Purushothaman Rajaram, a naturalized U.S. citizen, filed suit in federal court, claiming Meta Platforms, formerly known as Facebook, rejected him in favor of noncitizens holding H-1B visas to whom the company allegedly can pay lower wages. The H-1B program allows companies to hire qualified foreign workers for specialty occupations when there is a shortage of skilled workers authorized to work in the United States.
Rajaram alleged Meta violated a federal law commonly called section 1981 by discriminating against U.S. citizens in hiring. Section 1981(a), enacted shortly after the Civil War, says in part: “All persons within the jurisdiction of the United States shall have the same right … to make and enforce contracts … as is enjoyed by white citizens.” The district court dismissed Rajaram’s claim, finding that section 1981, focused as it is on racial discrimination, did not prohibit discrimination against U.S. citizens.
The Ninth Circuit reversed. “An employer that discriminates against United States citizens gives one class of people—noncitizens, or perhaps some subset of noncitizens (in this case, H-1B visa holders) — a greater right to make contracts than ‘white citizens.’ If some noncitizens have a greater right to make contracts than ‘white citizens,’ then it is not true that ‘(a)ll persons’ have the ‘same right’ to make contracts as ‘white citizens.’ That is precisely what the literal text of the statute prohibits.”
The majority relied heavily on the U.S. Supreme Court’s 1976 decision in McDonald v. Santa Fe Trail Transportation Co. that section 1981 prohibits discrimination against both white persons and nonwhite persons. The Ninth Circuit reasoned that if section 1981 prohibits discrimination against “(a)ll persons,” whites and nonwhites alike, it also prohibits discrimination against U.S. citizens and noncitizens alike.
One judge dissents
Judge Lawrence VanDyke “reluctantly” dissented. VanDyke said the McDonald ruling was driven by the legislative history of section 1981, which was entirely focused on the racial aspect of the statute. McDonald did not govern the outcome of this case, then, because citizenship discrimination is absent from the legislative history of section 1981.
Starting his analysis of the statute from scratch, VanDyke rejected Rajaram’s argument that section 1981 bars giving noncitizens more rights than citizens. “(T)he text of Section 1981 does not guarantee citizens the same rights as enjoyed by noncitizens. It guarantees both citizens and noncitizens the same rights as those ‘enjoyed by white citizens.’”
VanDyke continued: “Rajaram does not allege that he has not been treated as well as a citizen, but only that he has not been treated as well as a noncitizen. On this reading of the text, therefore, the disadvantage that he alleges is not one that the statute addresses.”
The New Orleans-based Fifth Circuit reached the same conclusion as VanDyke in a 1986 ruling: “Discrimination against whites is racial discrimination, but (in America) discrimination against Americans can never be discrimination based on alienage. It can only be discrimination based on national origin,” which is not prohibited by section 1981.
The conflict between circuit courts and a vigorous dissent in this case increase the odds the U.S. Supreme Court will step in. Section 1981 should not mean one thing in San Diego and another in New Orleans.
Eaton is a partner with the San Diego law firm of Seltzer Caplan McMahon Vitek where his practice focuses on defending and advising employers. He also is an instructor at the San Diego State University Fowler College of Business where he teaches classes in business ethics and employment law. He may be reached at [email protected].
